The conclusion is reached, therefore, that | presented a reversal of the judgment because under the record as it appears here the plaintiff was not entitled to recover because not the proper party to maintain the action. of the rejection of evidence which was wholly outside of the pleadings will work a grave injustice. If the decedent was engaged in an operation of interstate commerce, it was because of the unrevealed destination of the particular car, the knuckle of which he was undertaking to adjust when the train ran against it. The use that was being made of the car lay peculiarly within the knowledge The judgment is reversed, and the cause of the defendant. It would have been very remanded for further proceedings. It is not necessary to discuss the other points further than to state that there was sufficient evidence to go to the jury and on which to base a verdict. The plaintiff will have to rely on the federal Employers' Liability Act for relief. difficult for the plaintiff to learn the fact in that regard, to say nothing of proving it. BURCH, PORTER, and DAWSON, JJ., The defendant may almost be said to have concurring. had an option to try the case under the federal law or under the state law. If it saw fit to remain silent on the subject throughout, the plaintiff was forced to rely solely on the state law, unless she could obtain evidence of the interstate character of the commerce in which the accident occurred. Or the defendant might produce what would amount to prima facie evidence of interstate commerce which it could overcome if it desired, but which the plaintiff possibly could not, for want of information. In the present case the evidence introduced perhaps had a tendency to raise a presumption that the car, in handling which the decedent was injured, MASON, J. (dissenting). The petition unquestionably stated a cause of action. It was not necessary for the plaintiff to plead or prove the negative fact that the plaintiff's husband was not engaged in interstate commerce at the time of the accident-that would be anticipating a defense. The answer, so far as relates to the question under consideration, was merely a general denial. Under this the defendant, according to the ordinary practice, was entitled to disprove any averment of the petition, but not to show some affirmative independent fact-new matter-that prevented a recovery, notwithstanding every allegation of the petition should be state trip, but it contained nothing to preproved. The defense that the decedent revent a further showing that the car was not ceived his injury while employed in interstate routed for Ft. Worth until after the accident commerce was of that character. If no show- had occurred. The defendant had an obvious ing had been made as to the fact in that remotive in preferring a trial under the state gard the judgment could be sustained. Oslaw-the limiting of the judgment to $10,000. borne v. Gray, 241 U. S. 16, 36 Sup. Ct. 486, It should not be permitted to play fast and Inasmuch as, according to loose in the matter. It has not yet definitethe decision cited, the defendant was requir-ly asserted, by pleading or otherwise, that ed to prove the fact in order to derive any benefit from it, the defense was clearly one that it could waive. Doubtless if the de 60 L. Ed. fendant had specifically pleaded that the de The cedent had not been engaged in interstate commerce, this would have precluded it from showing the contrary. By the usual rule the failure to plead this defense in the answer Iwould of itself amount to a waiver. federal Supreme Court has modified this rule (Toledo, St. L. & West. R. R. Co. v. Slavin, 236 U. S. 454, 35 Sup. Ct. 306, 59 L. Ed. 671), and by that modification we are bound. But as I read the case just cited its doctrine goes no further than this-that a purely technical rule of pleading will not be permitted to deprive a litigant of a substantial right under the federal statute. Here the conditions there presented are reversed, and by the violation of the rules of orderly procedure the plaintiff suffers a serious wrong, while any error in the rejection of the excluded evidence is purely technical-utterly devoid of any effect upon the substantial rights of the defendant. Ordinarily the manner of raising the issue concerning the character of commerce in which an employé is injured is of little prac was at the time in the course of an inter the accident occurred while the switchman was engaged in interstate commerce. It federal act, so far as anything in the record could assert the contrary, if sued under the of this case is concerned. The courts should not allow the defendant, having direct and practically exclusive knowledge of a fact absolutely fatal to a recovery by the plaintiff, to conceal it until she had introduced all her evidence, neither pleading it nor referring to it in the opening statement to the jury, and then surprise her with it in the midst of a jury trial involving a number of controverted matters, unless some substantial right would thereby be protected. If the defendant had included in its answer a statement that the switchman had been killed while engaged in interstate commerce, or had in any way raised a question in that regard before the plaintiff had introduced her evidence, she could have dismissed her action and taken steps to have one brought under the federal statute, sparing herself the trouble, delay, and expense of a long trial, which would have been manifestly futile if the car were known to have been in the course of an interstate If all rules of procedure are subordinated to the attainment of substantial justice, the judgment should be affirmed, because it is the result of a fair trial of the real matter in controversy. If the plaintiff is held to compliance with the rules while the. defendant is allowed to ignore them, a reversal is a matter of course. JOHNSTON, C. J., and MARSHALL, J., concur in this dissent. (98 Kan. 336) If the interstate character of the transac- cause the defense relied on was not pleaded. tion had been pleaded and proved, a reversal would be justified only because the action was not brought in the name of the proper plaintiff a matter of form rather than substance. The beneficiaries are the same whether a judgment is rendered in favor of the widow or of an administrator. The case was fully tried out, with every benefit to the defendant that it could have had under the federal law, and with the additional advantage that its liability was limited to $10,000. There was no question of assumed risk in the case. The defendant asked no instruction on the subject excepting one to the effect that no recovery could be had if the injury was caused by "the ordinary risks incident to the employment of deceased as a switchman in the ordinary work incident to such employment." The ordinary risks incident to the employment do not include those due to the employer's negligence; and A contractor who contracted to erect a unthe decedent had no knowledge of the negli-ion station for a union terminal railway comgence relied upon by the plaintiff and found by the jury, and therefore could not in any event be regarded as assuming any of the risk with respect to it. 26 Cyc. 1225; Gila Valley Ry. Co. v. Hall, 232 U. S. 94, 34 Sup. Ct. 229, 58 L. Ed. 521. The real question in controversy in the case was whether the train started up again after having once come to a full stop. The defendant's liability turned on the solution of this question. It recognizes the purely formal character of its unpleaded defense by introducing the reference to it in the concluding pages of its brief in these words: “We are very desirous that this case should be reversed on its merits and not upon any technicality, as we earnestly believe that the defendant is entitled to judgment upon the facts shown by the record. It is with some reluctance, there fore, that we call attention to a technical ground, which in our opinion requires a reversal of the case, regardless of any other errors pointed out." The case is not controlled by St. L. & San Francisco Ry. v. Seale, 229 U. S. 156, 33 Sup. Ct. 651, 57 L. Ed. 1129, Ann. Cas. 1914C, 156, for there the defendant raised the interstate commerce question apparently before answering, and the question involved related only to the form in which it should be presented. Here it was not uncovered in any way until the defendant began introducing its evidence. No possible actual prejudice could result to the defendant from the form of the action, unless it would be subject to a further action under the federal law for the benefit of the plaintiff's child. Full protection against that could be afforded without reversing the judgment. I think the judgment should be affirmed, possibly with the condition that such protection should be given by making the administrator a party. If the ordinary rules of procedure are enforced, the judgment should be affirmed be CRANE CO. v. WICHITA UNION TERMINAL RY. CO. et al. (No. 20227.) (Supreme Court of Kansas. June 10, 1916.) (Syllabus by the Court.) RAILROADS 111 BONDS-INSTRUCTIONS. MECHANICS' LIENS pany gave bond to pay materialmen, pursuant correct. BURCH, J. The action was one to enforce a bond to pay materialmen, required of a railway contractor. The plaintiff recovered. The court granted a new trial, and the plaintiff appeals. The Dieter & Wenzel Construction Company entered into a contract to construct a For other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes union station for the Wichita Union Ter- money Crombie had received from the Dieter minal Railway Company. The railway com- & Wenzel Construction Company." pany took from the contractor a bond in accordance with the provisions of section 7006 of the General Statutes of 1909, which reads as follows: "That whenever any railroad company shall contract with any person for the construction of its road or any part thereof, such railroad company shall take from the person with whom such contract is made a good and sufficient bond, conditioned that such person shall pay all laborers, mechanics and material-men, and persons who supply such contractor with provisions or goods of any kind, all just debts due to such persons, or to any person to whom any part of such work is given, incurred in carrying on such work; which bond shall be filed by such railroad company in the office of the register of deeds in each county where the work of such contractor shall be. And if any such railroad company shall fail to take such bond, such railroad company shall be liable to the persons herein mentioned to the full extent of all such debts so contracted by such contractor." The bond was signed by the contractor and by a surety company. The contractor sublet the plumbing to William Crombie, who did business under the name of the City Plumbing & Heating Company. The plaintiff, Crane Company, furnished plumbing material to the subcontractor. While the union station was building the plaintiff furnished other material to Crombie for use at other places, separate accounts being kept for each piece of work. Crombie paid the plaintiff by means of his own checks drawn on his own bank account and in each instance directed the account or accounts to which the check should apply. The plaintiff sued on the bond for a balance due on the union station account. The defenses were that the bond did not cover the material furnished by the plaintiff, payment, and estoppel. The defense of estoppel was not submitted to the jury and the only meritorious issue was that of payment. The evidence relating to the material facts was quite conflicting. The court instructed the jury that Crombie had the right to direct how his payments to the plaintiff should be applied and that if he had done so the jury should observe the application. The verdict sustained all the plaintiff's contentions. The journal entry of the order sustaining the motion for a new trial reads as follows: "The court being fully advised in the premises, doth sustain said motion for a new trial, and does grant said new trial only for the reasons that the Dieter & Wenzel Construction Company was surety for Crombie to Crane Company, and that the said Dieter & Wenzel Construction Company paid money to Crombie and notified the Crane Company that they had paid the money to Crombie, and that Crombie then paid the money to Crane Company. This ruling is based upon the following cases: Crane Bros. Mfg. Co. v. Keck [35 Neb. 683], 53 N. W. 606; Lee v. Storz Brewing Co. [75 Neb. 212], 106 N. W. 220; Merchants' Ins. Co. v. Herber [68 Minn. 420], 71 N. W. 624. And the court further finds that at the time said money was paid by Crombie to Crane Company that Crane Company should have ascertained from the Dieter The finding of fact contained in the first part of the order was based on the following testimony given by the plaintiff's manager at the trial, and consequently binding on the plaintiff: would tell me that he gave Crombie a check and "At the time when he would call me up he I would tell him that we got a check. He never told me the amount of the check. We were getting checks at this time from Crombie on his general account and on the Bonham, Texas, job." The question is whether or not this admission rendered the instruction to the jury improper and whether or not the conclusion of law stated as a finding in the latter part of the order is correct or material. This court has hitherto followed the beaten path of the law relating to application of payments. A debtor has the right to direct how a payment on his indebtedness shall be applied. If the debtor give no direction the creditor may make the application according to his pleasure. If neither the debtor nor creditor has applied the payment, the law will do so, and generally will apply the payment to the oldest item or oldest debt, and to unsecured in preference to secured debts, although under special circumstances justice may require a different application. In this case the contractor simply paid Crombie what it owed him. The payment was made without reservation to satisfy the contractor's own debt. Unconditional title to the money passed to Crombie and it became his, free from any right or equity in the contractor to control his use of it. He could pay his taxes or club dues with it or could pay such of his merchandise creditors as he desired. When Crombie deposited the money in the bank to his general account it lost its identity, and when he gave his check to the plaintiff and directed the plaintiff to apply the proceeds in a specific way the plaintiff had no choice with respect to its conduct. It was obliged to apply the money as directed. The contractor acted in a dual capacity. It was an ordinary contractor under obligation to pay those whom it employed to construct the station. It was the principal on a bond given to the railway company for the use and benefit of laborers and materialmen. It did not make its payments to Crombie in its capacity as obligor in the bond. It paid as any debtor pays his creditors. Doubtless the contractor notified the plaintiff of payment to Crombie in order that the plaintiff might press Crombie for money. The contractor did not, however, satisfy its bond to pay materialmen who supplied Crombie with material by notifying them that it had paid Crombie. Crombie could apply his own money in his own way, and if the plaintiff had inquired of the contractor how much Crombie had been paid the The It was held that a creditor's right to apply ply the money received from Crombie ac-1 Crane Company without direction as to how cording to Crombie's direction. it should be applied. The Crane Company The statute quoted is a substitute for a applied it to another account of Walther's mechanic's lien statute for the protection of and filed a mechanic's lien on Keck's buildlaborers and materialmen who aid in rail-ing. The action was one to foreclose the lien. way construction. The lien is upon the bond, as in the case of statutory bonds to protect contributions of laborers and materialmen to public works not subject to lien (Griffith v. Stucker, 91 Kan. 47, 50, 51, 136 Pac. 937), and as in the case of bonds given under section 660 of the Code. All these statutes have a common purpose, and the decision in the case of Lumber Co. v. Douglas, 89 Kan. 308, 131 Pac. 563, 44 L. R. A. (N. S.) 843, is controlling here. In that case a bond was given under section 660 of the Code (Gen. St. 1909, 6255). A materialman furnished lumber to the contractor. Money paid the contractor on the contract was paid to the materialman without direction as to how it should be applied. The materialman applied the money to the satisfaction of earlier indebtedness for material used in other buildings. The suit was on the bond. It was held that the money paid the contractor was his own money which he could use as he chose. The bond did not require materialmen to watch the source from which money paid them was derived; the bond did not require that money received by the contractor under the contract should be paid to materialmen; and no equity existed in favor of the surety requiring that money received by the contractor and by him paid to the materialman should be applied to the debt secured by the bond. The liability of the surety was measured by the bond, which required unconditional payment of the claims of laborers and materialmen. The bond in this case is of the same character, and the liability of the obligors is measured in the same way. reads: direct its appropriation. If he fails to do so, "A party paying money to his creditor may the creditor may apply it on such part of the payer's mature indebtedness to him as he sees fit." 52 Kan. 462, 34 Pac. 974 (par. 2). In the case of Merchants' Ins. Co. v. Herber, 68 Minn. 420, 71 N. W. 624, cited by the district court, Herber was an agent of the insurance company and gave bond to discharge his duties and remit premiums collected ac In the case of Lumber Co. v. Douglas, the surety on the bond was a surety company which signed the bond for profit, and it was held that such a surety is not looked upon with the same favor as a person who voluntarily undertakes to answer for the obliga-cording to instructions. The instructions tion of another. The same rule applies to the surety on the contractor's bond in this case. Neither did the contractor voluntarily undertake to answer for the obligation of another as in cases of ordinary suretyship. The statute imposed on the railway company the duty to take the bond for the protection of laborers and materialmen, and a corresponding duty rested on the contractor to give the bond when requested to do so by the railway company. Consequently the contractor is not in a position to ask favors usually accorded an ordinary surety. were that all premiums were the property of the insurance company, and all collections for any month should be remitted by the 15th of the next month. Herber had been a member of a partnership which had acted as agent of the insurance company and which was behind with remittances. The bond did not cover past business. Herber made remittances more than sufficient to cover premiums collected while he acted as sole agent. The insurance company applied them to the old account, and when the agency terminated Herber was still indebted to the insurance company. In denying liability on the bond the court said: In the case of Crane Bros. Mfg. Co. v. Keck, 35 Neb. 683, 53 N. W. 606, cited by the district court, the Crane Company sold "It is true, as a general proposition, that a plumbing material to Walther, a contractor, surety cannot direct the application of payments made by his principal, and is bound by who placed it in Keck's building. Keck paid any application made by the principal and credWalther, who turned the money over to theitor, or either of them. Allen v. Jones, 8 Minn. 202 [Gil. 172]. This rule, as thus broadly stat-141 L. R. A. (N. S.) 500. The case has been ed, applies to cases only where the principal tried on its merits, and judgment has been makes the payment from funds which are his own, and free from any equity in favor of the rendered in favor of the plaintiff. The desurety to have the money applied in payment fendant appeals. of the debt for which he is liable. Hence, where the specific moneys paid to the creditor, and applied on a debt of a principal for which the surety is not held, are the very moneys for the collection and payment of which he is obligated to the creditor, he is not bound by such application, and is equitably entitled to have the moneys applied to the payment of the debt for which he is surety, unless the creditor can show that he has a superior equity to have them applied as they were applied.' 68 Minn. 424, 71 N. W. 625. In that case the bond was in fact literally complied with. For other reasons stated in the opinion it furnishes no support for the claim of the contractor in this case. The brief for the contractor proceeds on the theory that the district court did not approve the verdict for reasons other than those stated on the record and sustained the motion for a new trial generally. The theory cannot be made to work. The court carefully stated the specific ground on which the motion for a new trial was granted. That ground not being tenable, the court erred in granting the new trial. The judgment of the district court is reversed, and the cause is remanded, with direction to enter judgment on the verdict. All the Justices concurring. (98 Kan. 225) The principal contention is that the bills of lading which are the foundation of the action are void under federal statutes which govern the rights of the parties. The defendant filed a general demurrer to the plaintiff's petition, which was overruled. On the first appeal, which was taken by the defendant, it was argued that the demurrer should have been sustained. No suggestion was made to the court that the case was governed by federal law, and this court adjudged that the demurrer was properly overruled. In its answer the defendant expressly pleaded that the bills of lading were made in the state of Missouri, were Missouri transactions, and were governed by the law of Missouri. The statutes of the state of Missouri were set out, decisions of the Missouri courts construing the statutes were cited, and it was expressly alleged that the law of Missouri governed the rights and duties of the parties to the action. On the first appeal this answer was held to be good against the plaintiff's demurrer. The plaincourts of Missouri bearing on the subject. tiff replied setting out the decisions of the The defendant demurred to the reply. On the second appeal it was determined that the question raised was presented in such form that it became one of law for the court, SEALY et al. v. MISSOURI, K. & T. RY. CO.* and not one of fact for a jury, and the law (No. 19918.) (Supreme Court of Kansas. June 10, 1916.) (Syllabus by the Court.) APPEAL AND ERROR 1099(1) ESTOPPEL 3(3)-PLEADING-LAW OF THE CASE CONTENTIONS ON PRIOR APPEAL. The proceedings considered, and held, that the defendant is estopped by its answer to the petition and by adjudications of this court in its favor in former appeals from asking that the rights of the parties be now determined by federal statutes claimed to be applicable. [Ed. Note.-For other cases, see Appeal and Error, Cent. Dig. $$ 4370, 4374: Dec. Dig. 1099(1); Estoppel, Cent. Dig. § 4; Dec. Dig. Dig. 3(3).] Appeal from District Court, Labette County. Action by John Sealy and others against the Missouri, Kansas & Texas Railway Company. From judgment for plaintiffs, defendant appeals. Affirmed. W. W. Brown and James W. Reid, both of Parsons, for appellant. New, Miller, Camack & Winger, of Kansas City, Mo., and F. M. Harris, of Ottawa, for appellees. of the state of Missouri was declared. On these pleadings the case went to trial. A jury was waived, and at the beginning of the trial the following stipulation was made: "Any decision of the Supreme Court of Missouri, or of any appellate court of Missouri, which any counsel in the case may call to the attention of the court or the Supreme Court of Kansas, or any other court, may be construed as having been offered in evidence; that the Constitution of the state of Missouri and its amendment creating the Kansas City Court of Appeals, and the St. Louis Court of Appeals, of Appeals, may be regarded as having been ofand the statutes creating the Springfield Court fered in evidence." The plaintiff offered the bills of lading in evidence. The defendant objected on the ground the bills of lading were void under the laws of the state of Missouri and under the interstate commerce laws. The objection was overruled, and the record is barren of any other suggestion that the interstate commerce laws applied. On its side of the case the defendant offered in evidence the statutes of the state of Missouri which it had pleaded. BURCH, J. This is a third appeal. The Having appealed from the judgment of the nature of the controversy is sufficiently in- district court overruling the demurrer to the dicated in the former opinions which dealt petition and having kept silent then with rewith the pleadings. Railway Co. v. Hutch- spect to the application of the federal law, ings, 78 Kan. 758, 99 Pac. 230; Hutchings the action of this court is an adjudication v. Railway Co., 84 Kan. 479, 114 Pac. 1077, of the law of the case, binding on the deFor other cases see same topic and KEY-NUMBER in all Key-Numbered Digests and Indexes |